Calvo, Guillermo A. Vegh, Carlos A.
Currency substitution in developing countries: an introduction - MF May 1992 - ii, 35 p.
This paper reviews the main policy and analytical issues related to currency subsitutions in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis. (Extracted from document)
General
CURRENCIES
MONETARY POLICY
INTERNATIONAL MONETARY SYSTEM
EXCHANGE RATE
INFLATION
MONEY
00643-GG
Currency substitution in developing countries: an introduction - MF May 1992 - ii, 35 p.
This paper reviews the main policy and analytical issues related to currency subsitutions in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis. (Extracted from document)
General
CURRENCIES
MONETARY POLICY
INTERNATIONAL MONETARY SYSTEM
EXCHANGE RATE
INFLATION
MONEY
00643-GG